Mainers get a ‘vacation’ from higher gas taxes
By Rep. Alexander Willette
Nobody seems to fully understand why gasoline prices rise and fall. Supply and demand play a big role, but so do economic downturns, riots in the Middle East, Wall Street speculators, hurricanes in the Gulf of Mexico and the mysterious workings of OPEC. This year, however, the Legislature did what it could to keep prices from rising.
Last fall, a Republican legislator submitted a bill to eliminate the automatic, annual “indexing” of fuel taxes. The bill, LD 383, was written in response to one of the most common complaints voiced by the driving public. People hate the fact that the gas tax goes up every year on “auto pilot.”
Indexing is just a way for politicians to avoid going on record to raise taxes. It’s essentially taxation without representation. If we need more money for the Highway Fund, we should have the courage to vote for an increase and not hide behind a formula. This is part of being more transparent and playing straight with the people of Maine.
If you’ve ever pumped gas here, you’ve probably seen the sticker distributed by the Maine Energy Marketers Association explaining how much we pay per gallon in fuel taxes. We’re not talking peanuts. The indexed increase costs motorists more than $5 million a year – on top of the hundreds of millions of dollars we pay in the preexisting state and federal gas taxes.
Maine’s gasoline tax now stands at 31.5 cents per gallon, the second-highest in New England. The feds hit us for another 18.4 cents per gallon. That adds up to about 50 cents per gallon. Connecticut levies the nation’s highest gas tax at 49.6 cents; Alaska is the lowest at 8 cents. New Hampshire drivers pay a state tax of 19.6 cents.
During the last legislative session, our new governor submitted a Highway Fund budget that included the elimination of fuel tax indexing. The sponsor of LD 383 (the House chairman of the Transportation Committee) decided to “kill” his own bill in favor of achieving the same goal in the budget.
In mid-June, the Transportation Committee completed a line-by-line review of the Highway Fund budget. It included the removal of the indexing and the elimination of 76 vacant Highway Fund positions at the Maine Department of Transportation (MDOT). It also included funding for 600 miles of highway maintenance surface treatment each year of the biennium. This high level of funding has not always been accomplished. It’s also important to note that the highway budget fully funds MDOT and its two-year work plan without borrowing a single dollar in bonding.
With all these high points, the bipartisan Transportation Committee, for the first time in a decade, voted unanimously to pass the Highway Fund budget. The $637 million measure was then passed by the full Legislature.
In the first year, fiscal 2012, which began July 1, the elimination of the fuel tax indexing will save Maine motorists roughly $5.8 million. In future years, the savings really begin to add up since the tax compounds on itself. In 2013, the removal of this despised tax increase will save Maine drivers a cumulative $10.75 million. In fiscal 2014, after three years without indexing, the savings spike to $15.73 million.
All that money is better left in the pockets of Mainers in these tough economic times.
State Rep. Alexander Willette (R-Mapleton) serves on the Legislature’s Transportation Committee.
